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Get business plan help, read about starting a business, and more, with free articles on business planning and small business issues.Wed, 16 Aug 2017 11:30:19 +0000en-UShourly1https://wordpress.org/?v=4.8-alpha-402688 Reasons Business Plans Fail That No One Wants to Talk Abouthttp://articles.bplans.com/8-reasons-business-plans-fail-that-no-one-wants-to-talk-about/
http://articles.bplans.com/8-reasons-business-plans-fail-that-no-one-wants-to-talk-about/#respondWed, 16 Aug 2017 11:30:19 +0000http://articles.bplans.com/?p=59176As a full-time editor and academic mentor at an academic writing service, I have read hundreds of business plans over the years. To help students and startups, I have compiled a list of reasons business plans are rejected or given a low grade.

Of course, there are obvious reasons that business plans fail. For example, missing crucial deadlines for finishing the business plan, or drawing hockey stick profit projections can repel potential investors.

However, there are also less nuanced and more subtle reasons that investors and banks lose interest. These tips can help you avoid the minute and often overlooked mistakes that people make when writing a business plan. When investors and banks see hundreds of business plans every month, a small mistake can lead to a business plan being thrown in the rejection pile.

The top 8 reasons business plans fail

1. Bad business ideas

Nobody likes to talk about it, but the main reason why business plans fail is bad ideas. Most ideas look great on paper—but all too often, companies realize they have invested in a bad idea once it is too late.

To avoid this, smart businesses are using “user-driven development” (UDD) to build new businesses. Lots of ideas seem great until you figure out that the market doesn’t actually want your product. In order to ensure that a business idea is sound, entrepreneurs should search for product validation by reaching out to their target consumers before sinking huge amounts of time and money into the project.

At Stanford University’s d-school, the designers use UDD to develop products that are user-centered. Firms that want to innovate with a focus on customers often hold small meetings with the potential end users where they describe the project and then ask users for their opinions.

After the first round of discussion, the firm can go back to the drawing board to incorporate the helpful feedback. Second and even third rounds can enhance the final product’s popularity. For example, The Embrace Warmer was created by asking mothers with premature babies what they disliked about traditional infant incubators in hospital maternity wards.

The mothers responded that not being able to hold their baby was the worst part of the experience. By focusing on the needs of the end-user, the developers of The Embrace—who were also students at Stanford—were able to create a highly demanded and successful business plan. Avoid wasting time on a bad business plan by gauging the market sentiment toward your project before investing a significant amount of time and effort.

2. Employee compensation is not incentive compatible

Business plans can fail because employees are not compensated in a way that aligns the goal of the employee with the goals of the company. In game theory, a contract is an incentive compatible if “every participant can achieve the best outcome to him/herself just by acting according to his/her true preferences” (Nisan and Roughgarden, 2007). For example, if an employee is paid with annual or monthly bonuses then the employee will only do what is good for the company in the short run.

In 2015, Forbes released a nice article on different salary packages for different company goals. One option is to offer tailored benefits to the employee. Startups and small businesses can offer more customized salary packages than large multinational corporations.

For example, instead of offering a standard salary package of retirement plans, child-care assistance, savings program, determine what the employee wants the most. For example, elderly employees may not be motivated by child-care assistance, so don’t focus on that in their package. Secondly, instead of offering an upfront payment of 2 percent of the company’s stock, offer a salary that pays that 2 percent over several years to ensure that the employee stays committed in the long-run.

3. No exit strategy for firing lazy co-founders

Anyone who has started a company knows that team conflicts are inevitable. A good business plan should have a step-by-step procedure for handling internal disputes. First of all, each co-founder should have a specific set of responsibilities with deadlines and consequences for failing to meet those deadlines.

Choosing the right co-founder is as important as choosing the right spouse. During the first few years, you may end up spending more time with the co-founder than anyone else. First, you have to know what are your own strengths and weaknesses. Try to find a partner that diversifies your skill set. Also, ask for references. Try to find out who they worked for previously, how they got along with their coworkers, and why they left.

Another way to help alleviate this problem is by delineating roles and delegating tasks. However, if a team member just does not have the time or the competence to achieve the goals specific to their role, then the company should have a polite but quick method for ending the relationship. Mentioning how these types of situations will be handled in the business plan is important because hurt feelings and vindictive ex-owners can damage the firm’s reputation and profitability.

4. The team is not balanced

Another problem that I often notice on business plans is that the team is not balanced.

Company culture is an often underestimated challenge. I have read several business plans that present a compelling argument for a new product; however, the majority of plans fail to put together a team that has the competencies required to actually execute the business plan.

For example, I recently read a tech business plan that was making a health application for smartphones. However, the team did not have a single developer or IT specialist involved. If the business idea requires 80 percent of the labor hours to be performed by a software programmer, then the team needs at least one developer onboard. It is important to keep in mind that venture capitalists sometimes refuse to fund companies that only have one founder or have unbalanced teams.

My favorite tool for ensuring that I have decent estimations and great charts are the business calculators here on Bplans. Make sure to consider how legal costs and taxes will deduct from the bottom line.

Do not forget to factor in future expenses. For example, if the company needs to purchase new office equipment every three years, then the discounted value of those expenses should be included in the forecasted financial projections. Of course, the figures are only estimates, but they are important benchmarks that can be used to measure the company’s progress toward achieving their goals.

6. Spelling and grammar mistakes

Every time that I read a new business plan, my first step is to read each sentence out loud. In order to stop my mind from automatically filling in the correct spelling and grammar, I start by reading the last sentence on the page and working my way backward to the first sentence on the page. If you want to be 100 percent certain that there are no spelling errors, then consider hiring a professional editor to review your business plan.

Although some people think hiring a professional editor is “over the top,” the reality is that the most competitive firms have a professional editor review all of their documents for accuracy. If a bank or investor reads a business plan with typos, they will start to wonder if the entrepreneur is competent enough to run a successful business.

7. False assumptions

One of the final mistakes that students and startups make is falsely assuming the values of their investors and the values of their end-users, with some of the most common false assumptions being about their political or religious affiliation. This can be game over for successful companies, so startups should be especially careful.

Several examples exist of people that falsely assumed that their opinions were not controversial or were held by the majority. For example, Matt Harrigan, CEO of the startup Packetsled, stepped down after his comments about President Trump.

One piece of advice that my dad gave me can be helpful for writing business plans: “Opinions are like armpits. Everybody’s got them, and they all stink.”

The main point is that entrepreneurs and students who are writing a business plan should do their own research about the background of their potential investors and lenders. This ensures that you will have as much information as possible before pitching or handing over a business plan.

8. Failure to improve business plan after receiving feedback

Once you have finished writing your business plan, it is a good idea to send it out to at least three people before showing it to potential investors.

Think of these three people as your board of advisors. Ask them to read the plan and look for logical gaps in the content. If one advisor recommends a change that you disagree with, do not ignore his advice. Instead, ask the other advisors for their opinions and then make a decision. Edit your plan according to their constructive criticism, and thank them for their help.

Danielle Hendricks is an academic mentor at ACAD WRITE. In her free time, she is known for writing outgoing and funky pieces about the startup scene in Santa Fe, New Mexico. She has helped several firms optimize their business strategies before they pitch to angel investors in the local region.

1. Planning is vital, but be nimble

How many times have you been under the impression that you’ve come up with a unique “innovative” business idea, only to realize that someone else has already implemented it? Probably quite a number of times. So, do you lose heart and give up on your entrepreneurial dream? Of course not!

The thing about outstanding entrepreneurship is that your success may not necessarily come from a groundbreaking revolutionary idea or plan, but from knowing when, where, and how to strike. This means the proper execution of your idea or plan is of paramount importance.

A lot of entrepreneurs spend their valuable time and resources devising the perfect business plan. There are so many books and online resources available that are geared toward writing your perfect business plan that many entrepreneurs fall into the trap of planning but never doing. While you should do your research and validate your idea, the key to success is taking action.

One will always learn more through taking timely actions than simply conjecturing. Business owners are incredibly fortunate to live in an era with access to the granular insights big data can provide. The trick is knowing how to gather the right data. It can help owners make more precise decisions and eliminate guesswork in terms of timelines and execution strategy.

2. Foster meaningful relationships

As an entrepreneur, your business is likely built on relationships and partnerships with stakeholders. Your internal stakeholders are your employees and investors, and your external stakeholders are customers and suppliers.

You want those internal and external stakeholders to stick with you through thick and thin—they’re more likely to if you nurture meaningful and mutually-viable relationships with them.

Build customer loyalty

It’s no secret that most businesses prefer to work with repeat customers than pump in more time and money into acquiring new ones. But some satisfied customers still don’t become repeat customers.

The reason behind this is the lack of connection. This means that building trust and goodwill is not enough; you need to stay on their mind and keep the connection strong if you want them to come back. Think social media, loyalty programs, discounts and freebies, contests, and so on.

Connect with other businesses

As a business owner, it is natural for you to want to work with companies that you like and trust. This is why building long-term working partnerships with like-minded entrepreneurs in your industry will play a key role in your business’s success.

Attend networking events and get to know other business owners in your industry. Check out influential companies and find a way to connect, whether it be through a formal business meeting or a casual introduction. The key to networking is to offer mutual benefits, so approach it as though you have something to offer, rather than with a focus on what you can get from your new contacts. Perhaps you can offer to feature them in your newsletter or recommend their services to your existing customers. Building strong business relationships will create a sense of community and help strengthen your brand.

Nurture sources of funding

Healthy business relationships can lead to financial benefits, as well as access to other resources, too. Building a relationship means that there is mutual trust between parties, so dedicate time and energy to developing strong relationships with investors and mentors.

Just as you would in a blossoming friendship, reach out to potential business partners and be genuine with them. Ask them questions, learn from their experiences, and be open with them.

All entrepreneurs are looking for the best opportunities to turn their vision into a reality, and most of them are seeking funding. Therefore, it makes perfect sense to develop relationships with seed investors, venture capitalists, angel investors, private investing firms, and even banks, depending on your business goals and growth capacity.

3. Get a mentor

“A lot of people have gone further than they thought they could because someone else thought they could.” – Zig Ziglar

If you’re lucky enough to find yourself a good mentor, he or she will help you hone and own your vision; maybe they’ll help you build the skills and connections you need confidently chase and accomplish your lofty dreams.

Some of the world’s greatest entrepreneurs attribute their success to their mentors. Mark Zuckerberg, CEO of Facebook, often speaks of Steve Jobs as his mentor. Bill Gates, founder of Microsoft, has referred to Warren Buffet as his mentor and credited his success to him. Richard Branson speaks similarly of Sir Freddie Laker.

So how do you find a good mentor? Think of the industry stalwarts you admire and reach out to them. Make sure you network with industry bigwigs (depending on who you consider suitable to guide you in your current situation) and approach them to mentor you. There is no shame in asking someone to mentor you; in fact, the person will likely feel quite honored.

If you have limited connections in your industry, there are resources that can connect you to business mentors. Score, for example, can help you find mentors in your area.

The bottom line is a mentor will probably not come to you. Proactively seek him or her out, and be genuine with your request. Pick someone with whom you feel comfortable enough to share your fears and unusual ideas, and someone who has experience that you can learn from.

4. Embrace automation and the cloud

Automation tools are great for management processes that require precision. These include tasks like payroll, reimbursement requests, employee onboarding, and so on. If you think automating business processes is going to burn a hole in your pocket, think again. In fact, by embracing automation, your business will be able to enhance profits as well as productivity.

Automation programs like Kissflow are an investment, but the upfront cost for the right solution should both improve productivity and minimize losses in the long run. Many automation tools are cloud-based, so they can be used outside of the office, which can create more freedom for you and your business.

Other cloud-based applications can also help free up time, and in some cases reduce the need for physical office space. They can also be used to implement marketing campaigns, store documents, and handle accounting duties from anywhere.

5. Use a project management solution

As an entrepreneur, you’ll be juggling multiple projects simultaneously. It therefore makes perfect sense for you to add project management tools to your arsenal early on. Doing so can help you ensure that your projects are well-organized, proceed according to set timelines, and are completed within the predefined budget.

There are projected to be 15.7 million new project management roles to be added globally across seven project-intensive industries by 2020, for an economic impact of over $18 trillion, across multiple industries.

80 percent of “high-performing” projects are led by a certified project manager.

On average, it takes seven years in the profession to go from entry-level to managing large, complex projects.

Project management software like Workzone provides an intuitive interface where your team can share documents, collaborate on timelines, edit calendars, and more. A good project management solution should facilitate good interdepartmental communication through status reports, notifications, and time tracking.

6. Keep an eye on your competition

Any entrepreneur worth his or her salt knows that while it is important to stay ahead of competitors, it is also important to learn from them. This does not mean imitating them; that will do you no good. We’re not advocating corporate espionage, either.

It can also be very revealing to pose as their customer and buy (and use) their products, to help you identify their strengths and weaknesses. This type of research positions you to be able to either out do them, or pivot quickly to focus your efforts on a niche market or variation of the product or service.

7. Improve your digital presence

Your business needs to be discoverable on search engines, and your online presence should be mobile optimized.

Let’s take a look at a few interesting statistics:

60 percent American adults use smartphones and tablets to search for local products and information.

50 percent of consumers who conducted a local search on their smartphone visited a store within a day, as did 34 percent who searched on a computer or tablet.

Google My Business offers simple tools for managing your business description, hours, and location, and using it makes it more likely that your business will appear in search results—local SEO. Include high-quality photographs of the interior and exterior of your storefront so that customers can easily find you.

Also, ensure that your business website is mobile-optimized. Most searchers will wait for your site to load for no more than three seconds before abandoning it.

Make sure that the information mentioned on your business website and social media pages is consistent. Your blog posts and social media posts need to convey the same messages to your audience. Plus, if your business details like name and address aren’t consistent online, your chances of appearing early in search results will be reduced. Understanding and using SEO best practices can only help your business gain visibility.

Finally, manage your online reputation. Reply to comments and reviews as quickly as possible—studies have shown that most customers expect a response within four hours. Be sure to be as polite and professional as possible, as your response has a big impact on growing brand loyalty and customer experience.

In many ways, being an entrepreneur is like playing a game of chess: You stand to win only if you know how to play. The difference between successful and novice entrepreneurs is the former are persistent in their efforts and refuse to quit until they’ve figured out how to thrive.

To master the game of entrepreneurship, you need to view problems as opportunities and equip yourself with the right tools. Chess is all about strategy, just like entrepreneurship. The bulk of your strength comes from your ability to react to a given situation with the best possible move while thinking ahead.

Create a solid business plan, learn as much as you can, and find mentors to support you. Then take action, execute, and experience the excitement of growing your own business.

Pratik Dholakiya is the co-founder of E2M, a full-service digital marketing agency, and MoveoApps, a mobile app development company. As a passionate marketer, he shares his thoughts and knowledge on publications like Search Engine Land, Entrepreneur Magazine, Fast Company, The Next Web, and the Huffington Post, to name a few. He has been named one of the top content marketing influencers by Onalytica for three years in a row.

]]>http://pas-wordpress-media.s3.amazonaws.com/content/uploads/2017/08/Entrepreneurship-132x132.pnghttp://articles.bplans.com/how-to-master-entrepreneurship-without-breaking-a-sweat/feed/03 Tips for a Strong Startup Company Culturehttp://articles.bplans.com/3-tips-for-a-strong-startup-company-culture/
http://articles.bplans.com/3-tips-for-a-strong-startup-company-culture/#respondMon, 14 Aug 2017 11:30:25 +0000http://articles.bplans.com/?p=59129At BarBend, we like to think we know a thing or two about building strong, healthy bodies—and as a newer business, we’re also interested in creating a strong and healthy company culture.

The startup boom has disrupted and challenged many traditional ways of doing business, but perhaps none more so than company culture. Flexible time off, frequent remote work, and inspiring office spaces—once only a pipe dream for starched-collared stiffs chained to their cubicles—is now becoming a reality for many in the startup space.

But before we start celebrating too quickly, it’s important to make sure that these innovations are helpful and don’t end up hurting the company or its employees.

For example, although Google has been lauded for its creative and benefit-heavy company culture, it’s also been critiqued for creating a company “bubble” where the supposedly plentiful PTO is never actually used because the staff is too anxious about staying on top of their mountain of work.

A lot of attention has already been given to how leadership can affect company culture. While this is true, I think the case is sometimes overstated. Good leadership will go a long way, but a lot of the key tinkering comes with how the company itself imagines and upholds a sense of culture.

Having core values that balance the needs of a business, a mission that reflects the company’s true intentions, and a commitment to iterating at the level of culture can make a tremendous impact on a startup’s culture.

Let’s talk about each of these in depth.

1. Balance your core values

When defining core company values, many startups remain internally focused. They discuss how the company sees itself or relates to its employees or management.

Ultimately, these are questions of identity; at the early stages, this introspective tendency makes sense. To be successful, a company needs to understand itself, and talented people will always want to know that the startup they’ve agreed to throw in with has built-in mechanisms to ensure respect for their abilities.

For example, a value like “recognition” lets prospective staff know that their work will be appreciated, and “warmth” allows these same prospective staff to feel comfortable living a full, emotional life in the workplace. These are warm and fuzzy, but they’re also helpful.

But what about customers and clients? Too often, founders and C-levels get way too excited about their “no politics” value and don’t give enough attention to the kind of relationships and treatment they’re planning to extend to their customer base. In the end, this approach will probably hurt your company or hamper its growth.

Ultimately, your business depends on both your staff and your clientele. The former contributes value, while the latter contributes revenue. Both are essential, and if a startup gets overly caught up in its own hype, it risks ignoring the customer.

Framed Data, a company that specialized in user analytics, realized this point and summed it up in three simple words: “Everyone Does Support.” This core value basically means that customer support isn’t simply one dimension of the work—it lies at the heart of a business’s raison-d’etre.

Now, was this the only factor to Framed Data’s success? Of course not. But having customer-focused values front and center clearly made a significant contribution.

The risks of making those values peripheral should be equally clear and obvious. A startup needs to ensure that, while defining internal values is perhaps more exciting and sexy for you and your staff, your company’s conversation must remain focused on the customer.

2. Be real about your mission

This is another early pitfall of many startups. Sometimes, we get a little bit carried away.

Apparently, it’s not enough to just sell a good cup of coffee or a well-made pair of jeans. Startups feel that they have to change the world, and they want everybody to know about that in their mission statement and press releases.

Again, this “save the world mentality” makes sense for a number of reasons. For one, whether they admit it or not, most startups are modeling themselves somewhat on tech giants like Google and Apple that really did change the world. Moreover, new businesses often feel a sense of responsibility not to exploit people or the planet in the way they feel older corporations did. And finally, it’s easier to get excited about solving the problems of the world than, for example, making a workmanlike app that solves one very particular problem.

Understandable or not, there are a number of red flags that come with this mentality. For one, it’s extremely overplayed, to the point of being parodied mercilessly on shows like “Silicon Valley.”

But more importantly, having such an obvious gap between who you are and who you say you are can be very alienating to your staff. For example, Dan Lyons (who now writes for “Silicon Valley”) wrote of the cult-like atmosphere at HubSpot for his book “Disrupted.”

According to Lyons, the company described carpet spamming small businesses as “lovable marketing content.” This sort of ghoulish doublespeak is endemic to many startup cultures. Some seem to believe that raw enthusiasm will propel even the most harebrained of schemes. What it might actually do is frighten away your top talent, who are smart enough to see the gap between what a company says and what it does.

Case in point: Lyons left after two years, and HubSpot embarrassed itself by allegedly trying to extort and hack those trying to get Lyons’ book out there.

3. Iterate—build, test, and refine

Iterative development started as a software phrase, and eventually migrated over into the wider world of business processes. It hasn’t quite made its way yet to the conversation around company culture, and I think that that’s too bad, because the startup cultures would profit from the method.

For the uninitiated out there, to be iterative means to attempt something over and over again, refining one’s approach until the desired goal is reached.

One of the reasons this spirit of continual experimentation hasn’t quite permeated company culture is that many companies see their culture as something of a sacred cow. Again, this has a lot to do with identity—if company culture is constantly in flux, then it may appear to lack stability, which can seem weak or wishy-washy. Furthermore, without a defined culture, a company’s employees have no focal points to rally behind in their work.

To these objections, I say: sure, too much tweaking and overhauling is not a good thing. But, as a startup in a world with almost dizzying rates of failure, isn’t it crucial for any company hoping to eke out some kind of longevity to be self-reflective on a regular basis?

Here’s an example of a big kahuna that changed course midstream and saved itself in the process: Starbucks was struggling in 2008 from bad decisions and a worse economy, and the company brought back Howard Schultz to do some course correction.

Schultz did something seemingly suicidal and decided to overhaul the company’s culture, closing all stores for long retraining sessions. Several shareholders got him on the horn to chew him out for what they thought was reckless decision-making. But the gambit paid off, and Starbucks quickly turned around.

For a big and well-established brand like Starbucks, a move like this took a lot of guts. Startups have no excuse. Culture can’t afford to be static and monolithic. Treat it like the rest of the business—stay on top of what’s working, jettison what isn’t, and own the mistakes. In short, iterate.

As a final note, I think it’s important to mention that strong startup company cultures, despite the abundance of lists like these, are not simple recipes. They require dedicated and attentive stewardship, holding in suspension the needs of the business, the employees, and the customers.

Though not comprehensive by any means, I hope this article will help jog some thinking around your own company culture and help move it toward one that works for everybody.

Kenny Kline is a serial entrepreneur. His ventures are primarily focused on media and digital marketing. When not in front of his computer, he can be found beekeeping, knitting, and being as Brooklyn as humanly possible.

]]>http://pas-wordpress-media.s3.amazonaws.com/content/uploads/2017/08/annie-spratt-294452-132x132.jpghttp://articles.bplans.com/3-tips-for-a-strong-startup-company-culture/feed/0How to Use Your Business Plan to Create an Awesome Company Namehttp://articles.bplans.com/how-to-use-your-business-plan-to-create-an-awesome-company-name/
http://articles.bplans.com/how-to-use-your-business-plan-to-create-an-awesome-company-name/#commentsWed, 09 Aug 2017 11:30:04 +0000http://articles.bplans.com/?p=59106Everyone knows that a business name is important. It is the single most used aspect of your future brand. Ideally, yours will be mentioned by reporters, shared by referrals, and hopefully remembered by customers when the need for your solution arises.

A great name like PayPal can introduce your company, hinting at what makes it unique and interesting. PayPal is a payment solution with an upbeat brand and uniquely easy user experience—their name brilliantly captures this value proposition.

An intriguing name like Uber can help build buzz, causing people to wonder, “What is that?” An emotive name like SalesForce can resonate deeply with potential customers, lending a sense of authority.

Naming is often one of the first business activities where the rubber meets the road—where an idea becomes a reality.

While there are many thoughts on what makes a great name (easy to say, short, euphonious, phonetic, memorable), the insights that the team at Squadhelp and I have gained from nearly 10,000 naming projects point to a deeper principle than some of the simpler, surface-level guidelines.

We have discovered that a great name evolves from an excellent business plan. A company that has gone through the process of defining their business by writing a business plan generally has a greater sense of self-awareness than a company that hasn’t.

Many naming projects start with the thought, “I don’t want to limit creativity. Let’s just see what we can come up with.” While in the end a creative, short, pleasing name is always a good thing, I often find myself asking the leaders of new ventures to look back to their executive summary to find a value proposition (also known as a unique selling proposition) from which to build a foundation for their naming project.

Why do we exist? How are we different? How will we position ourselves in the marketplace? Why will our target market care? It is only when we look back at these critical questions that we begin to develop the insights we need to create a great name.

Using the business plan as a statement of a company’s identity, we can start making decisions about some deeper qualities of a name, such as: “I’d like a playful name (e.g. MailChimp or Squatty Potty) that will immediately connect with my audience and allow us to showcase our upbeat and fun brand experience”; or, “I need an elegant and classy name (such as Blackstone Labs, which currently sits at #26 on the Inc 5000 list) that will allow us to fit into the existing industry and command respect.”

What we can learn from Apple’s name

I’ve read many articles and posts in entrepreneurial communities that express the sentiment, “If Apple can win with such a poor name, why am I trying so hard to create an excellent name for myself?”

Contrary to this common sentiment, Apple is an incredible name when analyzed against the company plan. While it is not as enticing, clever, or fun as a name like Moody Mango (marketing agency), Love Bites (chocolate brand), or Naked Bun (burger restaurant), which were created by the Squadhelp community, Apple is still extremely smart and productive.

Entering into a market dominated by IBM, Burroughs, DEC, HP, and MassComp, Apple easily stood out—an organic fruit that virtually that everyone has experienced. The name foreshadowed their famous 1984 anti-corporate ad, and it still works today as they continue to be one of the most lively and people-focused companies around.

To further understand this deeper principle which is at work in great names, let’s look at the IT company Dream Hatcher. If we believe that a great name should simply be easy to say, phonetic, memorable, evocative, and so on, then this name should work for almost all IT companies, right?

But, certainly, there are many people reading this article (even some who own IT companies) saying, “I wouldn’t use that name.” That’s excellent! The truth is, even after following all the best checklists and naming advice available, the critical ingredient for developing an outstanding name is its ability to help you execute your business plan.

As the rubber meets the road and you begin to move out of the idea and planning stages of your business, you will need to create a name that will represent all of the qualities that your business plan outlines. To help you make some tough decisions, here are the guidelines we use in our crowdsourced naming projects.

5 approaches to choosing a business name

1. Stick with the classics

When your business plan requires you to fit into an industry, work with government agencies, or align with contextually driven or cultural norms, a classic name might be your best option. While classic names are becoming less common, there are still companies that decide to follow traditional naming standards.

While choosing to use a classic name may not be a good fit for many businesses, companies that want to exude professionalism and trustworthiness may benefit from a classic name. The Squadhelp community-developed names such as Red Shield Hunting Supplies and Sage and Saddle Outpost are both examples of strong, classic names.

Also, the Vault Law 100—a site that ranks the most prestigious law firms—demonstrates an industry dominated by classic names, often surnames of firm partners, that seems to follow the industry standard.

2. Craft an experiential name

Another option is to use your name to convey the experience of using your product or service to your customers. This type of name should give customers an idea of what their interaction with your product or service will be.

For example, when Twitter entered the somewhat crowded social media market, they used their name to capture their unique social experience. PayPal is one of my absolute favorite descriptive names (a subset of experiential names). Many experts believe that a descriptive name can cut down on marketing costs by intrinsically explaining the value proposition.

3. Get clever with your name

A clever business name is one of the most challenging to pull off—a name that you think is clever and funny could easily fall flat with your target audience. However, when done well, clever names can be very powerful—they help your business stand out from competitors and create an instant connection with customers.

As a customer, you’re much more likely to remember a name that made you chuckle than one that didn’t. Alpha Mail (an email app), Guac and Roll (a food truck), and EyeQ (a local eyewear store) are all examples of well-used, clever names.

4. Evoke an emotional response

An emotional name is any name that brings up some type of emotional response for the customer, whether it’s happiness, excitement, or nostalgia.

Tony Robbins’ health and fitness product The Body You Deserve is an excellent example of an emotional name. In contrast to Tim Ferriss’ excellent descriptive name, 4-Hour Body, Robbins’ name evokes a feeling of pride and personal strength—a brilliant way to add meaning and inspire prospects. Squadhelp winning name, Happy Belly, for an online food marketplace, is another fun example of an emotional name.

5. Intrigue your customers

Some names will capture customers’ attention not because they’re clever or descriptive, but because they have an air of intrigue. These names are the ones that are likely short and provocative, and provide little information to the consumer about the company’s products or services.

If your name piques your customers’ curiosity, they may be more likely to research your company and remember it in the future. To me, Uber always stands out as the company that harnessed their short, evocative name to drive curiosity throughout their geographic expansion.

While it is probably true that ventures rise and fall based on their strategic plan, a name can make a difference. Apple, Zappos, Twitter, SalesForce, PayPal, Uber, Google, Airbnb, Accenture, Costco, Squatty Potty, and Dollar Shave Club are all examples of companies who won the name game (some on their second try) and have leveraged their exquisite names on their road to success.

If you’re at this critical stage in your business development, take the time to determine what you want your name to do for your company (based on your business plan) before starting your name-storming process.

Grant Polachek is the Director of Marketing at Squadhelp—transforming the way names, logos, and taglines are developed by combining an affordable agency-level brainstorming process with the unmatched creativity of “the crowd.” His book “How to Develop the Perfect Name for Just About Anything” is available to Bplans readers for free.

]]>http://pas-wordpress-media.s3.amazonaws.com/content/uploads/2017/08/naming-your-business-132x132.jpghttp://articles.bplans.com/how-to-use-your-business-plan-to-create-an-awesome-company-name/feed/2How to Write a Mission Statement in 5 Easy Stepshttp://articles.bplans.com/writing-a-mission-statement/
http://articles.bplans.com/writing-a-mission-statement/#commentsTue, 08 Aug 2017 11:30:12 +0000http://articles.bplans.com/index.php/business-articles/writing-a-business-plan/writing-a-mission-statement/206I’ve had a 30-year love-hate relationship with mission statements. I’ve read thousands. I love it when a mission statement defines a business so well that it feels like strategy—which does happen—and I hate it when a mission statement is generic, stale, and completely useless. Which also happens, but not nearly as often.

What is a mission statement?

A good mission statement is useful tool for well-run business. It’s the “why” of business strategy.

A mission statement define a company’s goals in three important ways:

It defines what the company does for its customers

It defines what the company does for its employees

It defines what the company does for its owners

Some of the best mission statements also extend themselves to include fourth and fifth dimensions: what the company does for its community, and for the world.

Developing your company’s first mission statement, or writing a new or revised one, is your opportunity to define the company’s goals, ethics, culture, and norms for decision-making. The daily routine of business gets in the way sometimes, and a quick refresh with the mission statement helps a person take a step back and remember what’s most important: the organization has a purpose.

Don’t waste your time with a bad mission statement

That a traditional business plan often includes a mission statement isn’t a reason to do one. And make it useful or don’t bother. The vast majority of the mission statements are just meaningless hype that could be used to describe any business in the category.

People write them because some checklist or expert said they had to. There are actually webapps that poke fun at how most mission statements use vague, high-sounding phrases to say nothing. The comic strip “Dilbert” has had a field day making fun of them:

If you have a mission statement in your company, test it by asking yourself, honestly, whether your competitors could use exactly the same statement.

Does it distinguish you from all other businesses? If you gave an employee or customer a blind screening test, asking her to read your your mission statement and four others without identifying which is which, would she be able to tell which mission statement was yours?

How to write a great mission statement

So how do you make a useful mission statement? Over the decades I’ve spent reading, writing, and evaluating business plans, I’ve come up with a process for developing a useful mission statement, and it boils down to five steps.

1. Start with a market-defining story

You don’t have to actually write the story—it’s definitely not included in the mission statement—but do think it through:

Imagine a real person making the actual decision to buy what you sell. Use your imagination to see why she wants it, how she finds you, and what buying from you does for her. The more concrete the story, the better. And keep that in mind for the actual mission statement wording: “The more concrete, the better.”

This isn’t literally part of the mission statement. Rather, it’s an important thing to have in your head while you write the mission statement. It’s in the background, between the words. If you’re having trouble getting started, make a quick list of what your company does and doesn’t do.

2. Define what your business does for its customers

Start your mission statement with the good you do. Use your market-defining story to suss out whatever it is that makes your business special for your target customer.

Don’t undervalue your business: You don’t have to cure cancer or stop global climate change to be doing good. Offering trustworthy auto repair, for example, narrowed down to your specialty in your neighborhood with your unique policies, is doing something good. So is offering excellent slow food in your neighborhood, with emphasis on organic and local, at a price premium.

If your business is good for the world, incorporate that here too. But claims about being good for the world need to be meaningful, and distinguishable from all the other businesses. Add the words “clean” or “green” if that’s really true and you keep to it rigorously. Don’t just say it, especially if it isn’t important or always true.

For example, Apple Computer’s 2017 mission statement is:

“Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App store, and is defining the future of mobile media and computing devices with iPad.”

That one obviously passes the test of defining the company with flying colors. Nobody could mistake that mission with generic hype. And it’s an interesting change from the early mission as defined by founder Steve Jobs:

“To make a contribution to the world by making tools for the mind that advance humankind.”

Ikea, on the other hand, starts its mission statement with something that could be any company anywhere. “Our vision is to create a better everyday life for the [sic] many people.” To its credit, it goes on to define a “rest of the mission” that could only be IKEA:

“We make this possible by offering a wide range of well-designed, functional home-furnishing products at prices so low that as many people as possible will be able to afford them.”

And note, in this mission statement, how Sweetgreen incorporates a world vision into a product-oriented mission statement:

“Founded in 2007, Sweetgreen is a destination for delicious food that’s both healthy for you and aligned with your values. We source local and organic ingredients from farmers we know and partners we trust, supporting our communities and creating meaningful relationships with those around us. We exist to create experiences where passion and purpose come together.”

3. Define what your business does for its employees

Good businesses are good for their employees too or they don’t last. Keeping employees is better for the bottom line than turnover. Company culture matters. Rewarding and motivating people matters. A mission statement can define what your business offers its employee.

My recommendation is that you don’t simply assert how the business is good for employees—you define it here and then forever after make it true.

Qualities like fairness, diversity, respect for ideas and creativity, training, tools, empowerment, and the like, actually really matter. However, since every business in existence at least says that it prioritizes those things, strive for a differentiator and a way to make the general goals feel more concrete and specific.

With this part of the mission statement, there’s a built-in dilemma. On the one hand, it’s good for everybody involved to use the mission statement to establish what you want for employees in your business. On the other hand, it’s hard to do that without falling into the trap of saying what every other business says.

Stating that you value fair compensation, room to grow, training, a healthy, creative work environment, and respect for diversity is probably a good idea, even if that part of your mission statement isn’t unique. That’s because the mission statement can serve as a reminder—for owners, supervisors, and workers—and as a lever for self-enforcement.

If you have a special view on your relationship with employees, write it into the mission statement. If your business is friendly to families, or to remote virtual workplaces, put that into your mission.

And this is rare in mission statements. The vast majority are focused on messaging for customers. My recommendation here is not the norm. I include it because it’s good practice, even though not common.

While I consulted for Apple Computer, for example, that business differentiated its goals of training and empowering employees by making a point of bringing in very high-quality educators and presenters to help employees’ business expertise grow. That was part of the culture and, to my mind, part of the mission; but it wasn’t part of the mission statement. It could have been.

American Express, however, includes the team in its mission:

“We have a mission to be the world’s most respected service brand. To do this, we have established a culture that supports our team members, so they can provide exceptional service to our customers.”

4. Add what the business does for its owners

In business school they taught us that the mission of management is to enhance the value of the stock. And shares of stock are ownership. Some would say that it goes without saying that a business exists to enhance the financial position of its owners, and maybe it does. However, only a small subset of all businesses are about the business buzzwords of “share value” and “return on investment.”

In the early years of my business I wanted peace of mind about cash flow more than I wanted growth, and I wanted growth more than I wanted profits. So I wrote that into my mission statement. And at one point I realized I was also building a business that was a place where I was happy to be working, with people I wanted to work with; so I wrote that into my mission statement, too.

However, this element too, as with the suggestion about including employees, is unusual. Few mission statements do it. That’s understandable, since most mission statements are outward facing only, aimed at customers and nobody else.

Still, some of the best mission statements incorporate a much broader sense of mission that includes, or at least implies, the mission of ownership.

Warby Parker, an eyewear company, does a great job at voicing a higher mission that includes customers, employees, and owners.

“Warby Parker was founded with a rebellious spirit and a lofty objective: to offer designer eyewear at a revolutionary price, while leading the way for socially-conscious business.”

5. Discuss, digest, cut, polish, review, revise

Whatever you wrote for points two through four above, go back and cut down the wordiness.

Good mission statements serve multiple functions, define objectives, and live for a long time. So, edit. This step is worth it.

Start by considering developing a full mission statement for internal use and using a customer-facing subset for general publication. That’s common. Many companies have segmented mission statements, with sections set aside and categorized by type or goal. Use bullet points or sections if that works for you. Part of the reason people confuse mission with mantra and vision is that many businesses use them together, and many others also redefine them to fit their context. So what a company does for customers is often called vision, despite the formal definition.

Remember, form follows function, in mission statements, as in all business. Make it work for your business. Or don’t do it at all. If you want to call it a vision, and that works for employees and customers, then do that.

As you edit, keep a sharp eye out for the buzzwords and hype that everybody claims. Cut as much as you can that doesn’t apply specifically to your business, except for the occasional special elements that—unique or not—can serve as long-term rules and reminders. Unique itself, the word, means literally, the only one in the world. Use it sparingly. Phrases such as “being the best possible,” “world-class,” and “great customer service” mean little because everybody uses them. Having great customer service is way harder than writing that into a mission statement.

Read other companies’ mission statements, but write a statement that is about you and not some other company. Make sure you actually believe in what you’re writing—your customers and your employees will soon spot a lie.

Then, listen. Show drafts to others, ask their opinions, and really listen. Don’t argue, don’t convince them, just listen. And then edit again.

And, for the rest of your business’s life, review and revise it as needed. As with everything in a business plan, your mission statement should never get written in stone, and, much less, stashed in a drawer. Use it or lose it. Review and revise as necessary, because change is constant.

*Should I apologize for putting the word “easy” into the title of this piece? Sometimes I confuse interesting, useful, and important with easy. I always underestimate tasks I like doing.

]]>http://pas-wordpress-media.s3.amazonaws.com/content/uploads/2017/08/how-to-write-a-mission-statement-132x132.jpghttp://articles.bplans.com/writing-a-mission-statement/feed/496 Traits to Look for When Choosing a Business Partnerhttp://articles.bplans.com/6-traits-to-look-for-when-choosing-a-business-partner/
http://articles.bplans.com/6-traits-to-look-for-when-choosing-a-business-partner/#respondMon, 07 Aug 2017 11:30:19 +0000http://articles.bplans.com/?p=59071When you’re passionate about something and deeply committed to seeing it succeed, it can be hard to share control.

However, you’ve probably already realized that when it comes to launching your new business, the “if you want it done right, do it yourself” approach can only get you so far. Starting your own business already means countless long hours and late nights, and attempting to carry the weight alone can easily result in burnout.

Plus, the fact of the matter is that no matter how broad your skill set, you’re not going to be an expert at every aspect of running your business. This is especially true if you plan to scale your business quickly; filling every role will be nearly impossible.

However, choosing the person who will help you start and run a business isn’t as simple as selecting a friend you get along with, or someone who thinks your business idea is a good one. Some of the best business partnerships—think Steve Jobs and Steve Wozniak from Apple, or Evan Williams and Biz Stone from Twitter—were noteworthy not only for their success, but also for the way they combined unexpected, complementary skill sets to create unstoppable duos. While not all partnerships remain strong indefinitely (such as in the case of Jobs and Wozniak), a partnership has the power to propel a business to true greatness.

So, it’s a smart move to think carefully before you make this decision, as it’s a crucially important one. We turned to the experts at the Young Entrepreneur Council for their advice on what to look for in a potential business partner; here are the six areas they said were most important.

6 essential traits to seek in a potential business partner

1. Find someone reliable

Let’s start with the obvious—the last thing you want is a partner that can’t be counted on.

“A successful business partnership relies on many things, but trust and reliability are key,” says Greg Mercer of Jungle Scout. “A reliable business partner will share your passion and ambition, challenge you, and bring in new skills and ideas. But most of all, there will always be an element of trust that you are both dedicated to effectively working through any situation together.”

When you’re evaluating whether or not to take on a new partner, consider testing their reliability by giving them a bit of “homework” before you make your final decision. This doesn’t need to be anything time-consuming or complicated, but ensure that they are regularly able to deliver on time, that they follow up with you when they say they will, arrive for meetings on time, and so on. You’ll be able to learn a lot from these interactions, and potentially spot any red flags before the partnership is official. If they’re the type to constantly cancel and reschedule at the last minute, for example, that’s probably a bad sign.

2. Seek out complementary personality traits

Remember those noteworthy business partnerships I mentioned earlier? What often made them successful was the perfect combination of complementary traits.

Beyond skill sets, look also for partners with complementary personality traits. A founder who is quiet, reserved, and good at one-on-one interaction might do well to find a partner who is more gregarious and enjoys the spotlight. Similarly, a founder who has a tendency to pursue every shiny thing that flits into their path might be well-served to seek out a partnership with someone a little more measured and grounded.

“The most important thing you can look for in a business partner is a personality and attitude that works synergistic with your own,” suggests Michael Spinosa of Unleashed Technologies.

Spinosa highlights the ways that complementary personality traits can impact overall company leadership: “Finding the person that is going to help balance the leadership equation for your business is important, not only to the business, but to the employees,” he says. “This approach facilitates a higher level of trust between partners and it permeates throughout the organization.”

3. Find someone that challenges you

“The number one thing to look for in a business owner is someone who will challenge you to be better every single day,” says Suneera Madhani of Fattmerchant.

The reality is that you are going to experience days where you feel uninspired, annoyed, and just plain wiped out. One of the benefits of having a business partner on these tough days is that they should be able to reignite your fire.

Madhani also notes that having a business partner who challenges you can result in trying different approaches, more creative ways of thinking, and a business that is ultimately stronger. “My business partner and I have the same passion, but different points of view, which helps us make thoughtful, well-rounded decisions about our company,” she says. “Without someone to challenge your way of thinking, you won’t ever realize that your way might not always be the best way.”

4. Prioritize compatibility in terms of business trajectory

Do you and your potential partner have the same vision for the future?

Considering taking on a business partner? They had better share that same vision. If their goal is to scale quickly and sell, you both are in for a very bad time, as those are completely incompatible end goals and visions for your business.

“A successful partnership rows in the same direction,” says Robert De Los Santos of Sky High Party Rentals. “You must be compatible in the shared vision, goal, and purpose of the organization.”

Not only will an incompatible vision create trouble when it comes to deciding on your business’s direction, it will also make it difficult to weather hard times. Finding a business partner with whom you are compatible will make it possible for you to work together to overcome the challenges that crop up during the process of starting and running your business. “Compatibility within a partnership ensures perseverance through difficult times and sustained integrity of the business,” says De Los Santos.

5. Partner with someone who matches your level of obsession

Passion, sure—but obsession?

“I was going to say passion, but that word doesn’t go far enough for me,” explains Bryce Welker of Crush Empire. “I want passionate employees, but I need an obsessive business partner.”

For Welker, the difference between passion and obsession lies in one’s need to see something through for the long haul—a quality necessary in a business partner. “If I’m burning the midnight oil, I want them to be right there next to me,” says Welker. “Passion may generate great short-term results, but obsession is what builds lasting empires.”

6. Don’t forget the importance of integrity

Matthew Capala of Search Decoder considers integrity to be the “most important” quality in a business partner who is an equal within your company.

While starting and running your business, both you and your partner are bound to make a few mistakes. “A partner must be accountable for their actions without blaming employees, or outside influences,” says Capala. “Without integrity, you risk triangulating other members of your team, creating disharmony and eventual fissures.”

Just as you would test a potential partner for reliability, consider doing a few small projects with your prospect first to get a sense of their integrity. Do they own up to errors and communicate honestly, or do they fall into a pattern of blame? Find this out early, as a business partner who lacks integrity could wreak havoc for your business down the road.

What do you consider to be the most important quality to look for in a business partner? Share this post on Facebook or Twitter and let me know, or reach out to me directly at @BrianaMorgaine.

Briana is the content marketing specialist for Bplans. She enjoys discussing marketing, social media, and the pros and cons of the Oxford comma. Bri is a resident of Portland, Oregon, and can be found working remotely from a variety of local coffee shops. She can also be found, infrequently, on Twitter.

]]>http://pas-wordpress-media.s3.amazonaws.com/content/uploads/2017/08/what-to-look-for-in-a-business-partner-132x132.jpghttp://articles.bplans.com/6-traits-to-look-for-when-choosing-a-business-partner/feed/0Forget Viral Videos: Write a Book to Grow Your Businesshttp://articles.bplans.com/forget-viral-videos-write-a-book-to-grow-your-business
http://articles.bplans.com/forget-viral-videos-write-a-book-to-grow-your-business#respondWed, 02 Aug 2017 11:30:29 +0000http://articles.bplans.com/?p=59046As the founder of a publishing company focused specifically on serving entrepreneurs, I see the same problem over and over:

When a business owner decides they want to write a book (or do anything else, for that matter), their goal is to be the best. And, because the traditional publishing industry has one core metric—sales—that inevitably becomes their focus as well.

But the smartest entrepreneurs we work with have a different goal, summed up in this simple formula:

Book = Attention = Business Growth

I don’t mean attention in the narcissistic “everyone look at me” sense. What I mean is that attention is the key to achieving all your other goals. Whether you are wanting to sell more of your product, hire more great people, raise more money, or get speaking gigs, attention is the path to unlocking these opportunities.

There are many, many ways to get attention, but in my experience publishing over 500 non-fiction books for business leaders, writing and publishing a book is not only one of the best ways to get attention, it’s one of the most under-utilized by entrepreneurs.

Writing and publishing a book is not only one of the best ways to get attention, it’s one of the most under-utilized by entrepreneurs.

How does a book get you attention?

When many authors think about their goals, they immediately jump to traditional publishing metrics: sales, reviews, or even revenue.

For some authors, these metrics might be valuable, but for entrepreneurs, they are the wrong focus.

Instead, entrepreneurs should see a book as a multi-purpose marketing tool with a unique capacity to generate attention. In order to accomplish this, you may need to sell copies (and will certainly need to impress readers); but fundamentally, writing a book is a tool to drive attention to serve your other goals, not an end in itself.

We learned this when we published our very first book, written by an expert in pop-up retail named Melissa Gonzalez. We were thinking like a traditional publisher, focused almost entirely on sales. Melissa had other plans.

She’d written it for a small, niche audience, so she knew it wouldn’t sell very many copies. Instead, she wanted to focus on creating the best possible book for a very small demographic and, in doing so, grow her business.

It worked. Within three months of the book’s release, she’d been signed for multiple keynotes and panels as the world’s expert on pop-ups and had been profiled in The New York Times, Forbes, Fortune, Fox Business, and Bloomberg. Even more strikingly, she’d doubled the inbound leads to her business, and even signed a seven-figure consulting contract directly because a reader was so impressed that he reached out to her.

Melissa understood what we were just figuring out: as an entrepreneur, publishing can do so much more for your business than just sell copies.

How writing a book leads to business growth

Looking at Melissa’s story and the stories of hundreds of other entrepreneurs we’ve worked with since, there are four main ways that books lead to business growth:

1. Writing a book conveys authority, credibility, and expertise

A lot of people like to say that “a book is the new business card.” I disagree, because everyone has a business card. You can go to Office Depot and get business cards, but you can’t go to Office Depot and author a book.

What I like to say is that “a book is the new college degree.” About forty years ago, only about 10 percent of people had college degrees. If you had one, it was a major signal of credibility and authority. It meant something. But now that everyone goes to college, it’s less meaningful.

So what is a signal of credibility and authority now, one that’s reliable and rare?

Writing and publishing.

Publishing sets you up to be judged. It’s really easy to skirt by and get a college degree. You can’t really fake your way into writing a good book. Either you know what you’re talking about, or you don’t.

Yes, being judged is risky, but that’s why you get so much credit for a good book.

At my publishing company, this is why we won’t just work with anyone who throws money at us. If you don’t know what you’re talking about, you can’t just vomit out nonsense, call it a book, and get all the benefits. You have to write a good story to gain credibility and authority, and a good one is defined by how interesting and valuable other people find it.

2. Writing a book raises visibility and earns media coverage

When a media outlet wants a comment on something, who do they go to? The expert, right? And how do they know someone is an expert?

Because they wrote the book. The experts are the ones who wrote the books. Commentators write blog posts.

Once you’re publishing, media coverage is 10 times easier to get.

In some cases, authors are lucky enough to have the media come directly to them, but even when it doesn’t, proactive pitches are far more likely to land when you have the credibility of having authored a book on the topic.

And it’s not just the media. Having a new book is standard (and often required) to get past the gatekeepers who control access to the areas you most want to enter: lecture halls, television studios, boardrooms, media pages, special events, and ultimately people’s minds. Charlie Rose doesn’t say, “My next guest has just posted a cat video.”

How many people in your field have you seen get a lot of attention simply because they published? Even if you knew more than them, they got the attention that you didn’t, only because of the book.

3. Writing a book helps people find you

The number one search engine is Google. Number two is YouTube. Do you know what number three is?

Amazon. Even more relevant to entrepreneurs, it’s the number one search engine when looking for products and services (with 44 percent of searches for products and services starting there).

This goes beyond just attention. An ad can get attention, but no one goes searching for ads to make a decision about buying a product or a service.

When people look for buying information, they turn to experts or authorities. Where’s the first thing they think about to find information from an expert? Like the media, they look at the person who literally “wrote the book” on the topic.

A good story brings people to you, lets people know exactly who you are, and shows them how you can help them. It’s the best marketing tool you could ever use to not just build your brand, but actually attract clients.

4. Writing a book helps people talk about you

There is no better marketing than word of mouth. When someone you trust tells you to use something, you listen and you use it.

Anything that helps other people talk about you and your business is an incredible marketing tool, and a book enables word of mouth better than almost anything else.

This is because it puts your story into people’s mouths in your own words, so when they talk about you, they’re literally just saying what you want them to say. A good book causes people to repeat your terms, phrases, and ideas to other people.

We use this idea to help our authors position and frame their writing. We say, “Imagine someone at a cocktail party who read your book, talking to someone else in your potential audience. What would they say? Imagine what you want them to say to the other person.”

Once you understand that, once you can picture that conversation naturally happening between two people, you can construct the positioning and narrative of your story.

If you can write a book that is valuable to a people and solves a specific problem (ideally the same problem as your business), they will want to talk about it with someone else who has that problem.

Why? Because that makes them look better. That’s how word of mouth works.

Is it worthwhile?

As an entrepreneur, attention is the pathway toward better clients, employees, and investors.

Whether you use your book as a lead magnet, use it to build your credibility or authority in your industry, or simply give it away to help close sales, entrepreneurs are one of the few groups with the ability to turn the attention a book generates a substantial return on investment.

As WSJ bestselling author James Altucher says:

“Publishing a book is not just putting your thoughts on a blog post. It’s an event. It shows your best-curated thoughts and it shows customers, clients, investors, friends, and lovers what the most important things on your mind are right now.”

For many entrepreneurs, however, the time investment seems impossible. As business owners, we have hundreds of competing priorities, and making time to write a book seems like too much of a sacrifice.

Add to that the fact that most entrepreneurs are more talented “doers” than writers, and it seems obvious why many business leaders never write.

Fortunately, publishing doesn’t have to be as time-consuming or difficult as many believe. As business owners, you understand the power of leveraging your team to grow your business. Why shouldn’t you leverage a team to create your book?

There are plenty of ways to do this. At our company, we surround experts with a team of publishing professionals that are skilled at extracting ideas and turning them into a manuscript in 25 to 30 hours of time, all spent speaking on the phone. Other business owners use their existing teams, hire a ghostwriter, or partner with a co-author who enjoys the writing process and wants to leverage their ideas.

The point is this: If you believe a book—and the authority, media, attention, and word of mouth that comes with it—can contribute to your business growth, you owe it to yourself and your business to find a way to make it happen.

And you will. You’re an entrepreneur, after all.

]]>http://pas-wordpress-media.s3.amazonaws.com/content/uploads/2017/08/write-a-book-2-132x132.jpeghttp://articles.bplans.com/forget-viral-videos-write-a-book-to-grow-your-business/feed/04 Reasons You Might Not Want to Be VC Fundedhttp://articles.bplans.com/4-reasons-you-might-not-want-to-be-vc-funded/
http://articles.bplans.com/4-reasons-you-might-not-want-to-be-vc-funded/#commentsTue, 01 Aug 2017 11:30:57 +0000http://articles.bplans.com/?p=59031While there’s a certain cachet that comes with being able to say you raised a round of funding for your startup, realize that it’s a lot of hard work to actually secure venture capital (VC) funding, and there are reasons you might not want to.

To know which businesses might be a good fit for VC funding or not, venture capitalist Josh Linkner provides this guideline: 10 times minimum return within 10 years. If your market is big enough that you can generate a ten-fold increase in investment within a decade, then you are a good candidate for VC funding. Otherwise, start looking for funding elsewhere.

If your market is big enough that you can generate a ten-fold increase in investment within a decade, then you are a good candidate for VC funding. Otherwise, start looking for funding elsewhere.

Here are 4 reasons why you might not want to be VC funded:

1. You give up some control of your company

What a lot of startup founders don’t realize is that when you take on VC funding, you also take on business partners. Venture capitalists essentially buy equity in your brand, which means they now have a say in how you operate.

While ideally those investors have deep experience and contacts in your industry, they also come with their own opinions about how you do things. You might want to run your startup until you retire; a VC probably is trying to position you to sell so he can get his return on investment quickly and move on to the next startup.

Think twice: If you’re looking for money, get a loan. If you’re looking to bring on a partner and money, venture capital might be the right fit.

Spend plenty of time doing your research before you agree to be funded by a particular company and make sure you clearly understand how involved the investor will want to be, as well as what their vision is for your company moving forward.

Look for a VC with experience helping businesses like yours grow, and who have contacts to help you secure new business deals in your industry.

2. You don’t need funding

Your startup might be chugging along nicely, and then one day an investor comes to you and offers to give you a round of funding (this fairy tale scenario is unlikely, but still possible, especially as your success increases).

You’ve heard that it’s good to get financing even when times are good because one day you’ll need it, so you consider the offer.

Here’s the thing: Because venture capital comes with so many strings attached, it’s really not to your advantage to take funding, especially if you don’t need it. The VC firm could dictate where and how you spend the money, pressure you to take your business in a direction you don’t want to go, or even disagree with you to the point of killing your business.

In 2005, Claus Moseholm co-founded GoViral, a Danish company which specializes in harnessing the internet to promote advertisers’ videos and make them go viral. Moseholm and his team never considered taking investment capital. Instead, they launched successful advertising campaigns and used the profits to sustain the business. The strategy funded GoViral until 2011 when they sold.

Moseholm and his partners never took outside investment because they didn’t have to. As a result, they ran GoViral without interference and retained their stakes in the business until it was bought for $97 million.

Think twice: If you can continue to operate successfully without taking funding, do it. If you really want financing, consider taking out a business loan instead.

3. Your business may become unrecognizable

The thing about having too many cooks in the kitchen, as the adage goes, is that your recipe becomes unrecognizable. A venture capitalist is in the business to generate more revenue streams, but as an owner, you may have other agendas. Your company, which you raised from a fledgling in your garage, may grow faster than you’re comfortable with if you have someone primarily concerned with making money off of it. You may be urged to expand your team, your office space, or your product line before you’re ready to do so.

Groove founder Alex Turnbull had this in mind when he turned down a multi-million-dollar investment. Turnbull said that the investment would have forced him to focus on getting as many customers as possible. At the time, he was aware that Groove wasn’t ready to offer real value. Turnbull writes, “Had we tried to scale, we would’ve almost certainly been left with a ton of angry customers, even more ex-customers, and an app that couldn’t keep up with any of it.”

Plus, a venture capitalist may want you to be acquired by a mega corporation who could completely change your startup, boot you off the team, or dissolve it completely. If you’re lucky, you’ll be fairly compensated for this inconvenience, but at what price?

There are too many cautionary tales of startup founders who feel they sold their souls to the devil in exchange for venture capital, only to regret it later when the business they lovingly built was destroyed as it morphed into the VC’s new vision for the future.

Think twice: If you’re in the startup game to make money and can let go of your initial vision, by all means, venture capital (and the strong-arming that comes with it) may be for you. But if you want to continue to move it completely in the direction of your choosing, run the opposite way.

4. You give up precious time and energy

Getting your startup off the ground is like raising an infant—the first 24 months are usually the most brutal. Aside from perfecting your product or service, you have to tend to other equally important tasks such as marketing, hiring, forecasting, and so on. If you pander to VCs at the same time, an endeavor arguably as demanding as starting a business, you may be biting off more than you can chew.

Instead of pursuing VC funding, you might be better off finding the right customers. That’s how Michael Dell funded his business; many people know that Dell sold assembled PCs from his dorm room, but what most don’t realize is the brilliant strategy he employed to secure capital. Dell asked his customers to pay in advance, enabling him to hire affordable labor in the form of his college buddies and purchase hardware that met customers’ requirements. Why focus on acquiring VC money when you can build your customer base and generate revenues at the same time?

Think twice: If your business can rely on customers and profits for funding, then go for it. A solid customer base puts you in the driver’s seat. Should you need more funding to scale your business later on, you will be in a great position to acquire a loan.

Venture capital, while it provides an opportunity to significantly boost your bank account and invest in things that will grow your company rapidly, comes with certain caveats that you need to be aware of. Think through any financing decision you make, and ensure that it’s the right one for your startup.

Are you the one that makes killer cakes for every birthday? Do you churn out to-die-for donuts? If you’re ready to turn your talents into a profitable bakery, you’ve come to the right place.

We’ve teamed up with a few amazing bakers who were willing to share their great business advice. This guide is meant to give you all the ingredients you need to plan, start, and grow a successful bakery.

To get your piece of the pie, combine these tips with your impressive baking talents and you’ll be on your way to success.

Let’s meet the bakery business owners:

Michelle Green started baking when she was a teen, but it wasn’t until she was well into her corporate career that she realized baking was her true calling. Fed up with the stale muffins that seemed to be standard fare at all of her board meetings, this baker and mother of triplets decided to ditch the business suit and open her own shop in Australia called Three Sweeties.

Barbara Batiste was also baking treats at an early age for her close-knit Filipino family, and after years of amazing her relatives with her creations, she decided to turn her love of all things tasty into a business. She started in her home, and her business continued to expand. She has outgrown three commercial kitchens since, in part due to her creative business modeling, which includes both a catering service and a mobile dessert food truck. Now, she’s preparing to open a storefront in West Los Angeles called B Sweet Dessert Bar.

Victoria Roe started baking over a decade ago when she was asked to make a carrot cake for her mother in law’s birthday. She runs her business from home, a cottage industry, in a small village in Ohio. Most of her customers find her through word of mouth or learn about her business when they taste one her creations at a local coffee shop. She focuses on gluten-free and vegan–but you’d never know it to taste them. Running Three Leee Cupcakery from home gives Victoria the flexibility be present to her young family and pursue a degree in business while bringing in income.

Plan your bakery

With Michelle and Barbara’s help, let’s get the planning process started.

1. Select the kind of bakery you’d like to open

One of the first decisions you’ll have to make is the kind of shop you want to open. To do this, you’ll want to assess your talents, budget, and goals. Be sure you’re not making this decision in a bubble—you will want to have your ear to the ground on national trends in the industry—remember the cupcake shop craze (and the cupcake-focused reality TV shows) a few years back? But don’t simply take your findings at face value either. It’s equally important to do local market research to figure out how national currents will affect your particular location and demographic. From there: take a look at the list below and decide which one is right for you.

Online. You don’t need a storefront to open a bakery. You can start out online. With a killer website, pictures of your work, and a way to place an order, you can run it from your home.

Counter service. With a small commercial space, customers can walk in and pick up baked goods from an employee-managed counter.

Specialty service. If you plan to specialize in a certain kind of baked good, a specialty service is your best option. Whether you run the business from your home or rent a space is up to you.

Sit down. More owners are trying to capitalize on the sit-down and dine option. It’s a growing trend in the bakery industry right now. Picture a space that has both an area to order baked goods and spot to sit and enjoy them.

2. Write a business plan

Once you know what kind of bakery you want to open, you need to create a business plan. This will force you to look at the business from every angle. It will help you define your business, set goals, find ways to generate revenue, list expenses, identify your customer base, and examine your competition.

Assess your startup funds

As part of your business plan, you’ll dive into finances. One of the numbers you’ll need to generate is startup cost.You’ll need to compile a list of equipment, from appliances like ovens and refrigerators, to smaller items like utensils and pans. Make sure you create a full list of tools. The equipment will be a one-time hit, but you’ll also need money to live on while the business gets established.

You won’t make profits overnight, so you need to sit down and figure out when you’ll break even and how much money you’ll need to survive until that time.

3. Shop for space

If you’re running a bakery from your home, you’ve already got your space figured out. If you plan to invite customers into your shop, you’ll need a formal spot with a kitchen and an area for the public. Some bakers decide to rent out commercial kitchen space only. It’s a good option if you don’t want customers to walk through your shop, and just need a bigger, more equipped kitchen.

Whatever your needs, be picky. Shop around, compare prices, talk with neighboring businesses, and research the area to make sure you find the right space. It’s never a bad idea to look into small business incubator programs that might offer space and business training or mentorship at a reduced rate. Do not forget to consider the legal necessaries—which will vary state to state—such as obtaining a license to bake out of your own kitchen.

Roe says that following some simple guidelines laid out by the USDA lets her earn an income, develop wholesale relationships with local restaurants, independent hotels, and coffee shops, but still enjoy the benefits of being a stay at home mother. “Baking from home at sometimes can be a challenge, Mainly in the realm of time management and little fingers wanting to try all the frosting. I am also limited on certain ingredients that I am allowed to use depending on their acidity ratio and their storability because I am not a commercial kitchen,” she says.

Wherever you decide to run your bakery, be sure to think through the pros and cons and their related costs.

4. Price your baked goods

Most bakers base their retail price points on the cost of supplies and the time it takes to make the goods, but Green says this formula is flawed.

“Your prices should include things like clean up time, packaging, and time spent promoting your business on social media,” she says. “The biggest hidden cost in a bakery is time. It’s easy to forget the time you spent making flowers because you were watching TV while you did it. There is nothing worse than realizing afterward that you earned 50 cents an hour on a fabulous creation.”

5. Have a defined friends and family policy

Before you sell your first scone, be aware that friends and family will probably ask for a discount.

When you’re selling cakes and cookies as a side gig, it’s fine to give the neighbor or the PTA president a discount, but when you start your business, it’s different. “All those wonderful people who previously bought cakes off of you for the cost of ingredients are going to need to be re-educated about what you’re doing now,”

Green says. “Those who really love and support you will also understand your need to feed your family and pay your rent.” If you want to offer a 10 percent discount to friends and family, that’s fine, but whatever your policy is, make sure it’s consistent.

6. Find support

Speaking of friends and family, a support system is crucial in the baking business, Batiste says. Opening a business is time-consuming. Time spent baking is only half the commitment. You’ll need to market your business, take orders, help customers, and do an array of administrative tasks.

If you don’t have someone cheering you on, it can be hard. Whether it’s your spouse, a colleague, or business mentor, you need someone in your corner. Roe says, “To say it is just me would be a lie. Though I do all the baking, my husband helps me tremendously, from delivering to running out late for some organic butter.”

Feed the people

What’s the one ingredient every successful small business needs? Customers. This next segment will help you find and retain customers.

1. Be the best, the first, or the only one

Be original. These two words might seem like generic advice, but to survive, you can’t be a carbon copy of your competitors. “Be the best, the first, or the only one baking the kind of treats you make,” Green says. “If you can be all three of those things, that’s even better.”

Know what kind of competition you have in your area and work to set yourself apart. Green’s bakery, for example, is the only one in the area that sells nut-free cupcakes.

Roe’s focus is on gluten-free and vegan baked goods made with organic and local ingredients. “I really find happiness in seeing any child be able to have a decadent cupcake or piece of cake on their birthday that otherwise would not be able to because of food allergies. I have experimented relentlessly to create recipes that taste amazing, even know they are free of animal by products, gluten, pesky preservatives and all that other nasty stuff.” It’s an approach that resonates in her community where so many people value natural and locally sourced food.

One of Batiste’s original twists is a food truck. You know the food trucks that sell sandwiches and pizza to folks during the lunch hour? Well, Batiste has her own dessert trucks that travel the streets of Los Angeles selling all kinds of tasty treats. The trucks even have their own Twitter handle, so customers can locate them at any time.

2. Be prepared to market your product

“Being a fabulous baker doesn’t guarantee success,” Green says. “You also have to be a fabulous marketer too.” Too many bakers get wrapped up in technique, but “perfect ganached edges mean nothing if you have no actual orders on which to have perfect ganached edges.”

3. Focus on your customers

Your customers are your key to success. Happy customers become repeat customers, so work to make each customer experience memorable, Batiste says.

Ask your customers for feedback, talk with them at the counter, and ask for product suggestion once in awhile. Green agrees. “Make the customer experience count,” she says. “That’s the best way to get repeat customers and money in the register.”

Grow your bakery

Once the bakery is up and running, you can start thinking about growth. We’ve got a few tips to make sure it continues to thrive.

1. Diversify

Most bakeries are busy during the warm months. Shoppers that are out and about are likely to wander into your shop on sunny summer days. Plus, summer is full of parties like graduations and weddings. The end of the year will be busy too, Batiste says, as the holidays are always a hectic time for bakers.

To even out your revenue stream, you might consider diversifying your business. Batiste offers catering, for example. Her corporate clients keep a steady stream of orders coming through year round. Of course, adding products could increase your expenses and change your workflow, so make sure you weigh all of your options if you plan to branch out.

2. Hire help

When the orders pile up and you need more hands in the kitchen, you’ll have to make your first hire. Batiste says she had a hard time hiring help because she didn’t want the quality of her products to suffer.

She did bring several employees on board, but she did so cautiously. “Don’t hire anyone immediately and put new hires on a probation period. You want to make sure they are trustworthy and have the capability to learn,” she says. “Really delegate the way you want your business [to run] and how you want your food cooked and baked. Set the bar really high.”

3. Don’t forget about marketing

Your initial marketing strategies will hopefully result in a steady stream of repeat customers, but that doesn’t mean you should let up on your marketing efforts.

Try new marketing tactics. Buy ads on social media, participate in charity events, and hand out business cards as often as possible. You should always be looking for new ways to get your name out there, Green says.

4. Plan for retirement

When you’re first starting out, you’re thinking about breaking even. Putting away money for retirement is usually pretty far down the list of things to accomplish, but you shouldn’t let it linger.

Once the business is functioning, you should sit down with a financial advisor and talk about saving for retirement. As a business owner, it’s your responsibility to make long-term financial plans.

Do you have experience opening your own bakery? What worked for you, and what didn’t? Share this article on Facebook or Twitter and let us know what you think.

]]>http://pas-wordpress-media.s3.amazonaws.com/content/uploads/2014/07/shutterstock_176646242-132x132.jpghttp://articles.bplans.com/the-bakers-guide-to-opening-a-successful-bakery/feed/4Should You Build a Mobile App or a Website for Your Startup?http://articles.bplans.com/should-you-build-a-mobile-app-or-a-website-for-your-startup/
http://articles.bplans.com/should-you-build-a-mobile-app-or-a-website-for-your-startup/#respondWed, 26 Jul 2017 11:30:37 +0000http://articles.bplans.com/?p=59004Website, web app, or a mobile app—what would be the right “form” for your business idea?

Since the release of the very first iPhone, everyone has been treating the mobile-first business model as the new gold rush. Some, on the contrary, say that the modern user is already experiencing app fatigue and that people tend to use just three apps at most, so competing for desktop attention still remains easier.

As a new business owner, you may be overwhelmed by the choice. Will your product serve better as a mobile app (which offers a better experience on mobile, yet needs to be installed and can be deleted on a whim), or a web app (immediately accessible at any time, yet less simple to navigate from a handheld gadget)?

Some high profile businesses have heavily invested in their “mobile-first” experience (Uber, Instagram, Zomato Order), while others (Airbnb, JIRA, InVision) deliberately chose to stick with the web app version.

In the course of this post, we’ll specifically talk about the cases when you should build a mobile app—a product that is specifically designed to run on smartphone, tablets, and wearables and requires installation; or a web app—a client-server software application that runs in the browser (both desktop and mobile).

We’ll look into the reasoning behind the decision between these two options, and guide you toward the optimal choice for your product idea through a series of questions.

1. What is your product goal?

You are about to launch a new offering. Of course, you have specific business goals in mind, apart from merely making profits and changing the world.

Validate your product concept with an MVP

You have a new, out-of-the-box idea and you need to find out if your target audience is ready for it. Before devoting resources to building a full version, consider launching an MVP (minimal viable product) first. Learn more about validating your business idea and product concept here.

The MVP concept, popularized by Eric Rice of Lean Startup, assumes that before going all in and pouring significant sums into product development, you test the grounds with a “beta” version of your product.

This could be as simple as a screencast video shared with your target audience (that’s how Dropbox was launched), a landing page describing your unique selling point and key product features with an interactive mockup, or a one or two feature MVP mobile app with no actual backend connected.

This way you both minimize the risks of launching a product (that potentially) nobody wants, and at the same time, you can gather actual user feedback—what they like, how they interact with the product—and decide whether the demand is sufficient at this point.

To decide whether you should go for a web or a mobile MVP app, consider the following:

What does your target market prefer? Conduct a series of customer interviews, browse online industry reports, or invest in professional market research. This approach will yield critical information.

What are your competitors doing? Did they choose a mobile app or a website? Why? How could you improve the product if you chose the opposite option?

What are your budgets? Building an MVP mobile app will cost you slightly less than building an MVP web app, plus it will take less time.

Use data to understand your customer and their online behavior

First get to know how your audience interacts with your brand. Take a closer look at the data you gathered at the MVP stage or during your early operations. Do people access your website from the desktop or mobile devices? What mobile OS systems do they use? Which pages do they access the most frequently? This data could be gathered through Google Analytics and help you shape up the concept of your mobile app.

For instance, if most mobile users go straight on the promos or coupon pages, it would make sense to build a separate loyalty mobile app, which would also store the customer’s cards and allow them to redeem points.

Of course, you can “outsource” that to a larger couponing website instead of investing in mobile app development, but be mindful of the following factors:

A lot of third party vendors expect you to pay for listings and for additional visibility.

You will have to compete for customer’s attention with other businesses.

Gathering customer data for sending personalized offers is difficult or impossible as you are given access to truncated analytics only.

In the stages before you have specific data on your MVP and customer base, you will have to rely on the insights gathered from your market research and use that to think through the situational uses of your product. More on that just in a moment.

Gather more statistics about your current customers

In this case, you should first track down the best data sources and how to leverage those.

For instance, collecting and tracking online browsing behavior and shopping patterns is simpler to integrate within a web app. Specifically, in a web app, you can attribute sales more precisely to a certain marketing channel and measure the ROI (return on investment) or CAC (customer acquisition cost) based on the data. Next, you can install heat maps and conversion tracking, that highlight the better converting elements on your page, track the exact customer journey, and help you identify (and eliminate) the key bottlenecks.

You can also set up Google Analytics to analyze user behavior within the app and receive behavior flow reports or event tracking (e.g. purchase, ad click, and so on). Yet, the common problem here is that you are somewhat limited with the kind of events you can track.

Specifically, those are:

Menu selections

Video plays

Swipes

Button clicks

Purchases

Ad clicks

Even knowing the benefits of a web app, if you are wondering what’s happening in-store, a mobile app might be a better option.

For instance, Carrefour recently installed a number of iBeacons around their stores and built a special customer loyalty app, that helps users navigate around the shop for a more personalized shopping experience.

Their in-app user engagement rates grew by 400 percent after that, and the company was able to gather better insights into customers shopping habits and behavior, which were then used to optimize product placements and promo campaigns.

Increase brand visibility

In this case, look specifically into where and when customers are most likely to use your site:

According to Pew Research Center, 62 percent of US adults also used their smartphones to get health related information; 57 percent use their gadgets for online banking and financial transactions, and 30 percent used it to take an online class or discover educational content.

Think about the ways people will interact with your product. Can you make your idea more attractive through offering real-time access to data and immediate value?

A website, in this case, could include different listings with event details, photos, directions, and so on, along with the ways to register an account, subscribe for notifications, and purchase tickets if necessary.

That’s a fine product concept.

But here’s how you can make it even better if you opt to build a mobile app, rather than a website or web app:

Based on their location, users could be notified in real-time about events happening nearby.

Your app could incorporate guided navigation to the events, making it easy and streamlined for people to find events.

Users could receive instant notifications about their upcoming plans, along with on-spot promo offers such as “skip the line for an extra pay” or “upgrade your seat.”

They could get notified about their friends are visiting the same show or an event nearby and connect with them.

The bottom line is: If your idea can benefit from connecting users with more information immediately, building a mobile app will make more sense.

In this very case, a mobile app offers more interactive, real-time experience and caters better to the on-demand on-the-go needs of a savvy event goer. Building a website (web app) can be your next, second step to grab a larger market share.

3. Does your product assume or encourage frequent daily use?

If you think that users will interact with your product a couple times a day (five or more) on the go, building a mobile app is better. After all, clicking a few buttons from your phone to hail a cab is much simpler than typing all the details on a mobile website or its desktop version.

Once installed, they are easier to access, keep the users up to date with the latest in-app events, and are more convenient to use from smaller screens.

The common examples are:

Note taking apps

To-do lists

Social media

Games

All sorts of tracking apps

Maps and navigations

Transportation apps (including car sharing, taxi, and so on)

The key here is that most people want access to these products immediately. They do not want to type in the URL and wait until the website loads.

But remember to think your particular product offering all the way through before you make a snap decision. Consider frequently used work products—your email, that accounting software, or your favorite project management tool. You access them up to a couple hundred times a day, yet most interactions do not occur from mobile, and it wouldn’t really make sense for them to be mobile-only.

At this point, you should get back to point two (your product goal) and think again of the situational uses of your product. If your product would require fewer but longer term interactions (over an hour per day of non-stop usage), a web app would be preferable to most users.

4. Do you need access to the phone’s native features?

Consider the following points:

Will you users benefit from information delivered based on their current location?

Do you plan to leverage such features as Camera, Gyroscope, or Sensors?

If you answered yes to either of the above, a native mobile app would be a better choice.

Of course, experienced developers will say that they are certain workarounds and you can still access a camera or play games requiring Gyroscope support using HTML5, but that won’t make your product better or more stable in any way.

Also, web apps on iPhone are not allowed to send geo-push notifications or in-app notifications to users. Remember the event app example mentioned earlier? Mobile app users could be retained with geo-notifications whenever a cool event is happening nearby or their friends are attending one, but web app users won’t be able to benefit from this.

The common issue here, however, is that building a mobile product assumes creating two separate apps (iOS and Android) and having two separate budgets for that. The workaround here is to launch a product on one mobile operating system first (the more popular one within your target audience) and later port your app to another platform.

A web app, on the contrary, is accessible to users with any mobile or desktop OS installed. Yet, developing a full-featured web app with backend and server-side coding will cost you more than building a mobile app for one platform, and will also take more time.

There are numerous cases when a connection may not be available:

If you want to cater to the users in those “offline” situations, a mobile app is a more suitable choice in terms of convenience.

For instance, a number of maps and navigational apps feature an offline mode, which only uses the phone’s in-built GPS system, rather than internet data, for instance, the Maps.me app. Google Maps also allows you to download a certain map and use it with navigation offline, but the product functionality is largely truncated. Tripadvisor lets you download a quick city guide when you are abroad with the selected list of recommendations.

Instagram recently added an offline mode to their Android app, which would save all the users’ action up till connectivity is back. That was a particularly wise move as the company is working on expanding its presence in less developed countries. According to the latest data as of March 2017, the lowest internet penetration is in Africa (27.7 percent) and Asia (45.2 percent). Mind this fact, if you are planning to disrupt one of the local emerging markets.

6. What are your budgets?

Building a website, developing a mobile app, or full-featured web app should be considered three different budget lines.

According to Clutch data, the median cost of building a full-featured mobile app is between $37,913 and $171,450. Remember that this is the cost of building a mobile app for just one platform (iOS or Android).

If you opt for a mobile app MVP, the cost estimates would be closer to $5,000-$15,000. That would be a very simple app with only between one and three core features and attractive minimal design.

The average web application development cost is between $10,000 to $150,000, again largely depending on your product complexity and the company you hire.

You can reduce the numbers if you choose to outsource the development to a more affordable region (think Eastern Europe or Latin America), where average hourly rates are between $35 to $75, compared to the U.S. developers’ rates of $100-$200 per hour.

Building a well-optimized mobile website will set you back for much less—account for a budget of $5,000-$12,000.

Outsourcing application development certainly has its pros and cons. Here’s a brief account of those:

Pros of outsourcing application development:

You can tap into a wider talent base and get access to skills that are not available locally.

No hiring or overhead costs for hiring employees.

More competitive salaries.

On-demand access to talent.

Scale or downsize your team as needed.

Cons of outsourcing application development:

Communication difficulties and possible language barrier.

Time zone differences.

Security and privacy concerns.

When it comes to the final decision on the budgets, think again about the earlier questions and the answers you gave. Those are:

What are your product goal and common situational uses for it?

Will you offer real-time information delivery?

Do you intend to use native smartphone features?

How frequently will your product be used and in what cases?

Do you plan to offer offline functionality?

Finally, don’t forget to consider this important question: Will a mobile website be valuable enough to your customers? What kind of ROI can you expect from a mobile app versus a website?

Think through these questions carefully, and put your customer needs and desires at the forefront when making the decision and commissioning the project.